The Federal Reserve Transparency Act Continues To Gain Ground

In July 2009, Congress held hearings on the Federal Reserve System’s independence. Congress discussed Ron Paul’s bill, HR 1207, known as the Federal Reserve Transparency Act, as well as whether or not the Federal Reserve should continue to operate independently.

Even though President Obama campaigned on and promised greater transparency in government, and even though the American people are also demanding greater transparency in government, and even though a majority of the House has cosponsored HR 1207!, the Senate leadership continues to oppose Senator Jim DeMint’s efforts to attach it to another piece of legislation.

What is happening on Capitol Hill provides a window to to the types of arguments against real transparency and how the Federal Reserve System’s central bankers will defend their interests and status quo that enriches them so well.

A major claim is that auditing the Federal Reserve System would compromise its independence. Independence, however, means secrecy. The Fed does not want to loose it power to create and spend trillions of dollars. Nor does it want the public to realize that in so doing, it devalues every single dollar in circulation. The “independence” they defend is to make secret deals with other central banks and the “independence” to secretly bail out cronies, to the detriment of each American, and the “independence” to secretly enrich themselves. The American people should challenge this secret “independence.”

The banking elite claims that the Federal Reserve System has some kind of special intellectual power to control the Market and that the central bankers some how know what the Market needs, so we should just trust them. Yea, right. How can they know? The Market is too complex. No one can know what the Market needs except the Market. The Market sends signals, such as prices, that producers and consumers should react to and respect. No one should thwart or control price and production. Why should we believe that bankers know all and can ignore the economic laws of supply and demand? They may pretend to be the gods of finance, but their manipulation of the Market, which continuously produces the boom and bust cycles, shows them to be the false gods that they really are.

They also claim that the Federal Reserve System must remain above politics. However, no organization is apolitical when the President appoints the Federal Reserve Chairman. It is instead in danger of the worst kind of politics. The ability to counterfeit, er, I mean create, trillions of dollars and thus devalue every dollar without any accountability of direct elections or meaningful oversight is the best kind of political freedom, that is for the central bankers. With its immense power, the Fed typically will enact monetary policy favorable to a particular candidate near an election, ignoring the potential danger to the future economy. Why would they do this? The incentive is who gains the Chairmanship of the Federal Reserve.

Congress is ultimately responsible for the Federal Reserve, which granted its charter in 1913 and can revoke it any time. Congress has the Constitutional duty to protect the value of the money. Hoping to get a free pass for deficit spending, Congress has relinquished its responsibilities. Congress must take back its Constitutional duty to coin money found in Article 1 Section 8 of the Constitution. That Congress is finally looking at the issue is encouraging; that it has taken so long and has had to take an economic disaster for Congress to do so, is disgraceful.

About the Author

Born in Oklahoma, Raised in Texas, Studied in Mexico and Spain, Taught Spanish in Thailand, Now living in Hawai’i, Orthodox Christian, Libertarian, World Traveler, Writer, Sovereign Individual, SangrĂ­a Drinker, A Psychologically Unemployable Vagabond you can read about at Libertas.ws or follow on Facebook and Twitter.

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